Riskpro Basel Iii Offering Final
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Riskpro Basel III Offering provides comprehensive advisory services to help banks comply with Basel III regulations. This includes 1) assessing any gaps in a bank's risk management frameworks, data, models, and skills, 2) creating a roadmap and timeline for compliance, and 3) providing ongoing support and guidance during implementation. Riskpro takes a customized approach and offers services related to capital management, liquidity risk, credit/market risk modeling, and training to ensure banks meet both regulatory requirements and business objectives under Basel III.
Riskpro Basel Iii Offering Final
- 1. Riskpro Basel III Offering Overview of Basel III: Issues and Challenges RBIs latest guidelines on Capital Adequacy issued on May 2, 2012 require Banks to comprehensively address various elements relating to capital, liquidity, models, capital adequacy and overall risk management framework. The regulatory framework requires compliance with Basel III guidelines in a phased manner beginning from January 1, 2013. Clearly Basel III is creating more issues and challenges than opportunities, or atleast in the short term. Profitability, business strategies, competition, liquidity, capital raising efforts are all dependent upon a number of variables. Banks want to ensure that Basel III compliance not only achieves regulatory requirements, but also helps in meeting business challenges such as competition, improved profit margins, both of which are likely to be impacted due to additional capital requirements. Riskpro India has put together a long term and comprehensive offering that can support Banks in their quest for Basel III compliance. Our end to end services for Basel III begin with impact assessment and also include helping identify right technology and tools to implement for necessary measurement and analytics. Riskpros Basel III Advisory Services Basel III services are categorised in the following areas Building robust Risk Management Frameworks compliant with Basel II and Basel III Capital Management Liquidity Risk Management Credit and Market Risk Models and technology for Basel III Training and Awareness More details on each of the above major areas of service are given on the next page. Our approach to Basel III Compliance 1. Riskpros Basel III projects start with a detailed gap assessment with respect to risk policy framework, data quality and availability, use of models and technology and level of skill set within the Bank 2. We map Banks compliance against each point of the Basel III requirements and issue a Diagnostic Gap report 3. Impact study for major areas such as Capital Adequacy, capital requirements, liquidity risk ratios etc is carried out. Results are presented to the Banks Board for necessary action. Board members can then take action in the form of establishing business strategies. 4. Roadmap for Basel III compliance is then defined based on overall timelines outlined by RBI. 5. Project execution and implementation is aligned to these timelines to ensure timely compliance as well as ensure that the Bank is not unnecessary implementing components required for compliance much later in the program 6. Monthly status report is presented to Senior Management. 7. All regulatory changes, circulars and action plans are communicated to the Bank and incorporated during the course of the project.
- 2. BASEL III ADVISORY RISK MANAGEMENT CAPITAL CALCULATIONS & LIQUIDITY RISK MANAGEMENT FRAMEWORKS MGMT Develop or enhance existing Risk Management Policies, liquidity risk framework and Diagnostic study of impact of procedures and frameworks that policies to meet Basel III Basel III on capital requirements are compliant with Basel III requirements Advisory on effective capital Basel III Impact Assessment & Developing and Measuring the planning strategies over next 2-6 Diagnostic Review Liquidity Coverage Ratio and years Net Stable Funding Ratio Aligning business strategies with Capital & Risk Weight Basel III regulatory requirements Eligibility conditions for Computation liquidity ratios Developing risk based pricing Capital Calculation and related frameworks Stress Testing Liquidity Risk templates and checklists Comprehensive stress testing and Liquidity Calculations, Develop a framework for Capital back testing frameworks templates and related Conservation Buffer reporting formats Basel III impact on new products IFRS Impact study and initiatives Regulatory reporting and liquidity disclosures Maximising ROE Pillar II and ICAAP enhancement CREDIT AND MARKET RISK MODELS and BASEL III Training TECHNOLOGY Impact study of Counterparty Training on Basel III Credit Risk (CCR) Market risk model validation Guidelines by RBI as per Basel III requirements Develop Counterparty Credit Risk Policy as required by Basel III Training and Credit value adjustment Pillar II of Basel III framework workshops models for credit risk CCR for Derivative Exposures IRB Impact Risk Management Recruitment and Talent Collateral management management Model validation framework Portfolio & Business Analytics Stressed VaR for Market Risk approach
- 3. Team and Resources Riskpro has developed a strong team of Basel and Risk Professionals. Our team resources include market risk, credit risk experts, Banking professionals, model development and validation teams, quantitative specialist and generalists Bankers who can help to handle even the most challenging implementations. Checklist and Templates used in our engagement Worksteps Remarks Mapping against client requirements: Data requirements, Risk Impact of Basel III on capital adequacy ration ('CAR') measurements & calculations Excel template for sourcing all required data points specific to Data identification for impact assessment conducting the impact analysis Excel model for calculating incremental capital requirements Determining impact of Basel III on CAR under Basel III Requirement under ICAAP, based on business strategy and Capital management plan incorporating Basel III aspects forecasted balance sheet and P&L Presentation on Basel III, its evolution and impact Ready presentation - shortcomings of Basel II, Basel III assessment components and impact of Basel III Checklists to evaluate Basel III readiness focusing on Mapping against client requirements: Check lists for six key areas assessments Assessment of the regulatory capital computation process and High quality capital base capital management plan, if any Risk metrics and processes governing counterparty credit risk Enhanced risk coverage and securitization framework Measures adopted by bank to minimize impact of pro-cyclicality Pro-cyclicality on capital adequacy Pre-emptive measures to minimize impact of additional capital Systemic importance of the institution requirement for systemically important institutions Comprehensive review of LCR, NSFR and the monitoring & Global liquidity standards reporting framework governing the same Leverage Ratio Calculation of leverage ratio and associated processes Disclosure requirements MS Word template for Basel III disclosures Template with specific disclosure requirements under Basel III Checklist to assess disclosure policies and governance Checklist to assess coverage of disclosures framework around the same Next Steps Riskpro is very keen to partner with your organisation to ensure smooth implementation and compliance with RBIs timelines for Basel III implementation. Please contact us for more details.
- 4. Annexure: Basel III Training Session Topic Key Learning Duration Recap of Basel II and A quick recap of Basel II 2 Hours evolution of Basel III Evolution to Basel III and key enhancements Capital and Leverage Ratio Raising quality of the capital base 2 Hours Complete understanding of eligible capital under Basel III Exposure measurement and computation process Calibration of the leverage ratio Harmonizing liquidity Understanding of LCR, NSFR and liq. management 2 Hours standards framework Net stable funding ratio (NSFR): measurement methodology Impact of harmonizing liquidity standards Countering pro-cyclicality Mitigating pro-cyclicality & the need for counter-cyclical 1 Hour buffer Understanding enhanced securitization & CCR framework 2 Hours Enhancing risk coverage Forward looking provisioning Building capital buffers through capital conservation Total Training 9 Hours